Manhattan U.S. Attorney Announces Transfer Of 18 Valuable Works Of Art To Marc Dreier Victim
Works By Warhol, Rothko, Lichtenstein, And Hirst Among Those Transferred
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States Marshals Service transferred 18 seized works of art by such well-known artists as Andy Warhol, Mark Rothko, Roy Lichtenstein, and Damien Hirst (the “Artwork”) to a victim of the fraud committed by MARC DREIER (“Victim-1”). Prior to his arrest, DREIER displayed the Artwork in his residence. DREIER gave Victim-1 a security interest in the Artwork, then valued at over $30 million, purportedly to secure the payment to Victim-1 on promissory notes that DREIER secretly forged, and that had a face value of over $110 million. Victim-1 previously transferred $1.65 million in forfeited funds to the Government, which the U.S. Attorney’s Office will seek to make available to victims of DREIER’s fraud.
Manhattan U.S. Attorney Bharara said: “Marc Dreier lived in a world of luxury and opulence built on a foundation of fraud he committed against his many victims. With this transfer of valuable artwork, one of his victims receives some payment on what Dreier owed, and another $1.65 million is forfeited to the Government, which will benefit victims of this massive fraud.”
According to public documents filed in this case in Manhattan federal court:
DREIER was the founder and managing partner of Dreier LLP, a law firm which, along with its affiliates, employed more than 270 attorneys. From approximately 2002 through December 2008, he conspired to engage in securities and wire fraud involving the sale of fake promissory notes and the embezzlement of Dreier LLP client funds. During the course of the scheme, DREIER collected more than $700 million through the sale of the fake promissory notes, only a portion of the principal and interest of which he actually paid. He also misappropriated more than $46 million in client funds. The total out-of-pocket losses to purchasers of the various fake notes, and to law firm clients whose funds were embezzled, was approximately $400 million.
DREIER, 63, of New York, New York, pled guilty in May 2009 to one count of conspiracy to commit securities and wire fraud, one count of securities fraud, five counts of wire fraud, and one count of money laundering. In July 2009, U.S. District Court Judge Jed S. Rakoff sentenced him to 20 years in prison and ordered him to pay roughly $388 million in restitution. Judge Rakoff also issued a preliminary order of forfeiture covering various assets, including the Artwork, which was seized from DREIER. The Government and Victim-1 subsequently requested that the Court enter a settlement agreement, pursuant to which Victim-1 would receive the Artwork and would pay $1.65 million to the Government. The $1.65 million payment reflected a term of Victim-1’s security agreement with DREIER, which required Victim-1 to pay $1.65 million to DREIER for the security interest in the Artwork. Following an evidentiary hearing in July 2013, Judge Rakoff so-ordered the settlement agreement between the Government and Victim-1.
The Artwork transferred to Victim-1 consists of the following works of art:
- Household gloss on canvas by Damien Hirst, “Elaidic Anhydride (hot pinks spot painting)” (2007)
- Silkscreen ink and synthetic polymer paints on canvas by Andy Warhol, “Rudolph Nureyev” (1975)
- Silkscreen ink and synthetic polymer paints on canvas by Andy Warhol, “John Lennon” (1985-86)
- Oil on canvas by Alex Katz, “Red Tulips” (1967)
- Household gloss on canvas by Damien Hirst, “2-(P-CHLOROPHENOXY)-2-METHYLPRIOPIONIC ACID (multicolored spots)” (1998)
- Polychrome aluminum by Robert Indiana, “Love” (1966/1999)
- Enamel on steel by Keith Haring, “Untitled” (1982)
- Acrylic and graphite on canvas by Agnes Martin, “Loving Love” (2000)
- Silkscreen ink and acrylic on canvas by Andy Warhol, “Jackie (Blue Jackie, 3 quarter view)” (1964)
- Silkscreen ink and acrylic on canvas by Andy Warhol, “Jackie (White Jackie)” (1964)
- Silkscreen ink and acrylic on canvas by Andy Warhol, “Jackie (Profile looking down)” (1964)
- Silkscreen ink and acrylic on canvas by Andy Warhol, “Jackie (smiling Jackie w/JFK)” (1964)
- Oil on canvas by Mark Rothko, “Untitled” (1957-63)
- Oil and magna on canvas by Roy Lichtenstein, “First Painting with Bottle” (1975)
- Screenprint by Roy Lichtenstein, “Reverie (C. 38)” (1965)
- Three dimensional archival print by John Baldessari, “Arms and Legs” (2008)
- Color photographs by Richard Prince, “Untitled (Four Women)” (1980)
- Offset lithograph by Roy Lichtenstein, “Crying Girl” (1963)
Mr. Bharara praised the outstanding efforts of the Criminal Investigators of the U.S. Attorney’s Office and thanked the U.S. Securities and Exchange Commission and the U.S. Marshals Service for its assistance in this case.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force and Asset Forfeiture Unit. Assistant U.S. Attorneys Jeffrey Alberts and Sharon Cohen Levin are in charge of this prosecution.